Tag Archives: CW Capital

Stuyvesant Town’s former special debt servicer is doing battle with a company called Cobalt VR. (Photo by Sabina Mollot)

By Jackson Chen

A decade after the cityʼs most infamous apartment deal collapsed, investors are still fighting over the money lost and won in Stuyvesant Town.

The New York State Appellate Division of the Supreme Court has upheld a ruling that could have forced special servicer CW Capital to shut down sales until a fight over the $1 billion it earned while serving as caretaker to the 11,200-unit apartment community is resolved.

CW Capital — an affiliate of Fortress Investment Group — was appointed special servicer to the $3 billion Stuy Town/Peter Cooper Village mortgage after Tishman Speyer handed back the keys to the historic East Side development in 2010 following the market crash.

The complex was originally purchased in 2006 by Tishman Speyer and BlackRock for $5.4 billion. When they defaulted on the mortgage, CW Capital was put in charge of the property management and creditors for the years the property remained in default.

Windows were replaced on the top floor of 2 Peter Cooper Road late last year as part of a project that includes roof decks for those apartments. (Photo by Sabina Mollot)

By Sabina Mollot

Late last year, a few top floor apartment windows at 2 Peter Cooper Road were replaced with a kind of window not previously seen on the property. CWCapital declined to comment on the project at the time, although new Blackstone owner told T&V new windows would not be coming to the rest of the complex.

Meanwhile, earlier this week, at the same building, an eagle-eyed neighbor spotted workers on the roof, installing what appeared to be a roof deck.

When asked about the project, Paula Chirthart, a spokesperson for Blackstone, confirmed the alteration to the building to offer roof access was started by CW, but, like the new windows, would not be repeated at other buildings.

Jon Gray, global head of real estate for Blackstone (Photo by Sabina Mollot)

By Sabina Mollot

Blackstone and Ivanhoé Cambridge announced on Friday that they closed on the deal to purchase Stuyvesant Town and Peter Cooper Village. This means that the companies have assumed ownership and CWCapital, the special servicer since 2010, no longer has any ownership interests in the property.

The property wound up with a price tag of $5.45 billion, the New York Times reported, which would make the cost even more than that of the historic sale to Tishman Speyer. However, according to a spokesperson for Blackstone, the net price paid was still the previously reported amount of $5.3 billion. The previous figure includes full payment of transfer taxes. Prior to announcing the deal in October, the city had agreed to provide Blackstone with around $225 million in tax breaks and a loan that will be forgiven.

Meanwhile, the closing was rushed in order to prevent yet another pesky lawsuit against CWCapital, this time threatened by commercial landlord SL Green, according to the Times. SL Green was involved the 2006 sale of the property, having lent and lost about $200 million. But perhaps more importantly, the article noted, a real estate investor whose partners include Fortress, CW’s parent company, had challenged a midtown skyscraper SL Green wanted to build. “Fearing that the suit could delay the closing, the company offered SL Green what it considered a token amount, $10 million.”

This reported threat came on the heels of another suit against CW, this one by a group of lenders led by hedge fund Appaloosa, being withdrawn. That group had filed suit over CW being able to walk off with a reported $566 million in fees from the sale and other services rendered at Stuyvesant Town.

Following years of Stuyvesant Town residents complaining of dorm-style apartments, or more specifically, young people packing into apartments with pressurized walls, Council Member Dan Garodnick asked Blackstone to address the issue before taking over the property.

Garodnick made the request via a letter to Jonathan Gray, the Blackstone Group’s Global Head of Real Estate, that was sent on Monday.

In it, he noted the “persistent and troubling issue for many tenants: overcapacity apartments.”

“The city’s Housing Maintenance Code restricts a single dwelling to ‘not more than three unrelated persons,’” Garodnick said. “It is clear the number of unrelated residents may exceed that number in many apartments throughout the complex.”

He went on to note that it’s often students from New York University and other schools moving into these apartments, and because they aren’t staying in the complex long term, tend to be the source of noise complaints from neighbors. “This behavior is especially common when there are more individuals in an apartment than the law allows,” Garodnick said. “As you take ownership of the property, I am hoping you will take immediate action to correct this situation — including additional steps to keep apartments from being blocked off as dorm rooms — throughout Stuyvesant Town and Peter Cooper Village.”

Garodnick told T&V he thought this issue “should be a top priority for Blackstone, to not only assess but also to develop a game plan to deal with it.”

Reps for owner meet with tenants on Associated as well as maintenance and safety concerns

A petition recently circulated to save the Associated Supermarket got over 800 signatures online and hundreds more on paper. (Photo by Sabina Mollot)

By Sabina Mollot

New owner Blackstone has committed to keeping an affordable supermarket in Stuyvesant Town, although it may not be Associated.

Last week, a petition was started to save the 25-year-old supermarket, which, as Town & Village reported in October, was being pressured to end its lease early, even after CWCapital turned down an offer from a competing market to go in at a higher rent.

However, last Thursday, Blackstone reps told members of the Tenants Association board at a private meeting that there would continue to be an affordable option for tenants when shopping for groceries.

As of T&V’s press time, an online petition in support of the store had over 850 signatures. The Tenants Association had also created paper petitions that were placed by each store cashier, which got hundreds more signatures. Many residents had been concerned that the store would be replaced by a more expensive supermarket or no supermarket at all.

Blackstone rep Paula Chirhart, who was at the meeting with the Tenants Association, later told T&V, “We are committed to keeping an affordable grocery in that space.”

She noted that the Associated still has two more years to go before the store’s lease is up.

Mayor ‘focused’ on affordability how?

Re: “TA not scared off by $4.7B debt figure,” T&V, Jan. 8

To the Editor:

Here we go again! T&V states, “The mayor has so far not taken a position on the TA’s goal of a non-eviction condo conversion, though he’s focused on preserving affordability at the approximately 6,000 apartments in ST/PCV that are still in fact affordable.”

How can Town & Village or any other newspaper or media state this as fact when the evidence is to the contrary? What proof is T&V using to make this statement? Using basic 1+1=2 math any child should be able to understand that raising the rent every year is going to make once-affordable apartments UNaffordable. And this, unfortunately, is the truth. Like his Republican predecessors, our mayor has appointed all nine members of the current landlord-friendly Rent Guidelines Board which has just given tenants another annual rent increase by a vote of 5-4. And unless the mayor changes the composition of his personally-selected Rent Guidelines Board to one favoring tenants instead of landlords, as it has for the past 24 years, we can look forward to more and more rent increases for as long as de Blasio is in office.

When I moved to Stuy Town I was using 20 percent of my salary to pay rent. Now, as a result of yearly rent increases, I’m paying 50 percent. So would someone explain to me how this supports the statement that the mayor is “focused on preserving affordability at the approximately 6,000 apartments in ST/PCV”? I will not believe that de Blasio cares one bit about affordable housing in Stuy Town until he appoints five members to his board that will vote in favor of tenants. Anything less is just more political malarkey and newspapers should not assist in its dissemination.

John Cappelletti, ST

Editor’s note: John Cappelletti makes a fair point. The mayor’s talk about preserving affordability in Stuy Town is encouraging, but some action would be nice, too.

Tenants want details, not vague statements

To the editor:

Ok… so we applaud our political representatives before we hear what they have to say … Ok… so we applaud repeatedly while they speak without knowing the implications of what we hear. Ok… so we leave the rally at our City Hall with the thought that perhaps in unity we are getting closer to our wishes.

We were, after all, assured that Fannie and Freddie will not finance a deal unless the deal guarantees long-term affordability. We hear, in one way or another, that the mayor’s folks are working a deal with CWCapital that would a) satisfy the bondholders and b) guarantee that some apartments would remain affordable.

I hope that I am wrong on all accounts, but does any of that have the sound of what we want? A deal?

Made by whom? Representing whose interests? Long-term affordability? For whom? Affordable apartments? Of those… how many, and for whom? So CWCapital gets to keep the place? “Keep” is rather a firm thing. There is nothing ambiguous or equivocal about “keep”… and we get… what? Well, right now, whatever it is, it is heavy on ambiguity and equivocation (wrapped in emphatic assurances).

As I see it, we really have not squared off against the principle that we are mere tenants living on someone’s property at, quite close to, their pleasure. We haven’t squared off against the prevailing grip that government has no real right to interfere in the running of business. Business is, after all, private.

Nowhere along the line has our side insisted that the private exists within the public, through the will of the public, with the financial (socialism) support of the public. That form of restraint, along with civility has been our self-imposed handicap.

So perhaps, just perhaps, the next time a political leader speaks, we consider holding applause until, by answering our questions, we are shown to what non-generalities that leader is committed. In that way, over time, political leaders may come to speak to us with a focused demonstration of acknowledgement and respect, and we, for our part, more than placards and background to a center that is not us.

Representatives from CW Capital and CompassRock said that they hope to have the major construction on the new management office finished by this May at a meeting with the Stuyvesant Town-Peter Cooper Village Tenants Association on Tuesday evening.

The new management office is planned for the space between Playground 8 and the buildings at 272, 274, 276 and 278 First Avenue along the First Avenue Loop and construction officially began on January 22.

The meeting, held at P.S. 40 on East 19th Street, was held to answer questions about the construction of the new office because residents have said they’ve been unable to find any information about the project, such as what the plans for the new building are, how much of a disturbance construction will be and when the structure is expected to be completed.

Hard to believe management’s heat ‘policy’

I am so happy to find out why my apartment has been freezing all winter and why every time I complain to management, nothing is ever done—management’s goal is to provide a temperature of 72 degrees, which I do not believe given how many times my thermostat has been below 72.

Like all of the neighbors in my building, I too have bought a space heater and I am sure the New York City Fire Department would be thrilled to know most everyone in PCV/ST runs a space heater to keep warm.

Seventy-two degrees is only a few degrees above 68, the level enacted into law to prevent slumlords from providing inadequate heat. If the legal minimum threshold were 64 degrees, would CompassRock’s target be 68?

PCV/ST apartments are not tenements in a poor section of the city, but potentially the best place to live for a family with beautiful grounds and playgrounds, none of which the current owners and management can take credit for.

What they can take credit for is providing a very annoying and uncomfortable living environment with their heat policy. With the amount I pay for rent as a market-rate tenant, I expect a certain level of comfort and not a heat policy designed to provide the minimum amount of heat legally required.

Rendering of the new management office as seen in 276 First Avenue (Photo by Kent Howard)

By Maria Rocha-Buschel

Stuy Town Tenants Association is set to host a meeting to discuss the construction of a new management office as concern over disruption caused by the project continues to rise.

The TA is primarily concerned about quality-of-life issues, including the removal of walkways and benches, loss of greenery and possible noise.The original management office on Avenue C was swept away by Hurricane Sandy . There are plans to turn what’s left into a children’s facility.

The new management office will border 272, 274, 276 and 278 First Avenue and while CW Capital met with residents to discuss the project last October, there has been little communication since then. Local elected officials — City Councilmember Dan Garodnick, Assemblymember Brian Kavanagh and State Senator Brad Hoylman — sent a letter to CW Capital vice president Andrew MacArthur last Friday asking for transparency about the project.

The Department of Buildings is to conduct an audit of the site in order to ensure compliance with the Building Code and Zoning Resolutions.

The letter from the elected officials was in response to a meeting held by tenants of 276 First Avenue that was organized by building resident and former Community Board 6 chair, Mark Thompson.

“Seniors especially are really stressed out because now the park is gone,” he said. “(Stuyvesant Town) is being marketed as this green oasis in the city and they’re cutting all the trees down.”

Kent Howard, of 276 First Avenue, told T&V that he started the website StuyTownBigDig.com to keep track of what they see going on.

“It’s hard to tell at this point but it looks a lot larger than I originally anticipated,” Howard said.

“Tenants are concerned,” Thompson added. “That’s the bottom line.”

The TA meeting will take place on Tuesday, February 18 at 6 p.m. in the auditorium at PS 40, 320 East 20th Street.

Doors will open at 5:45 p.m. Representatives from CW Capital and CompassRock will be there, in addition to local elected officials Senator Hoylman, Assemblymember Kavanagh and City Councilmember Garodnick.

Why are short-term renters targets for A.G.?

Re: “Airbnb won’t cooperate with A.G. investigation,” T&V, Oct. 10

To the Editor:

I am intrigued that Eric Schneiderman decided to prioritize investigating Airbnb. Wasn’t he supposed to be prosecuting the banksters responsible for our continuing economic disaster? Come to think of it, where are those indictments?

Rich people don’t sublet their homes for short periods. Middle-class homeowners and renters do. There may be some nefarious businesspeople subletting to even lurkier subtenants on Airbnb, but I’m pretty sure most of the people using Airbnb to make money or have a place to stay are ordinary middle class people. Some people rent out their apartments because they have lost jobs and are traveling, looking for work. Others are having difficulty paying their monthly costs due to stagnating wages combined with continually rising co-op maintenance fees and endless assessments.

Again, the rich don’t have these troubles. Should middle-class homeowners be forced to sell their apartments or incur credit problems because of temporary financial setbacks?

I can’t sublet my apartment on Airbnb due to the fact I store confidential materials here, but if that wasn’t an issue I probably would occasionally sublet it.

I have fond memories of the “illegal” sublet I rented as a young graduate student in 1990. If that apartment hadn’t been available, I never would have been able to live in Manhattan, close to my school and internship. Again, this type of issue is not a problem for the rich — only for the middle class.

Schneiderman and Liz Krueger might want to think about the fact that most of the middle-class people who sublet on Airbnb in New York are registered Democrats…

Sincerely,

Anne Rettenberg,
Kips Bay

Sukkah in park not unconstitutional

Re: Letter, “Sukkah doesn’t belong in public park,” T&V, Oct. 10

To the Editor:

The writer who objects to sukkahs in public parks has gone beyond the facts in stating, “the Constitution espouses the separation of church and state.”

The First Amendment forbids legislating, “an establishment of religion, or prohibiting the free exercise thereof,” and Article VI forbids a religious test for holding federal office. An establishment of religion, the thing forbidden, is a requirement that all citizens worship God in the manner of only one religion and must contribute to its financial support. Allowing the free exercise of religion means that every citizen may choose to worship God, or not, in the manner he or she deems right, and in doing so may exercise all the other First Amendment freedoms — of speech, the press and peaceable assembly.

The Constitution mandates freedom for religion, not freedom from religion.

Yet Mendy Weitbaum may have exceeded these rights, in the same way one would by erecting a personal sign in a public park suggesting, “Drink Coca-Cola,” or “Fly American Airlines.” Yet, if he did exceed his rights, it’s because of erecting a symbol of his personal preferences, not because the symbol is a religious one.

Don Murray, ST

Re: Letter, “Sukkah doesn’t belong in public park,” T&V, Oct. 10

The phrase, “separation of church and state” is nowhere to be found in the Constitution. Thomas Jefferson used it in a letter to the Danbury Baptist Association in 1802 to assure them that the state of CT would not interfere with their religious practices.

James Madison said the purpose of the First Amendment was to prohibit Congress from establishing a national religion. Just because someone doesn’t want to see a sukkah, a cross, or anything else in a public park doesn’t make it unconstitutional, so the rabbi can put up a sukkah anywhere he wants.

Thank you for your consideration.

Joan Carmody, PCV

‘Interesting’ owners

They have three transients in every eight apartments; they send you reminder notices on the day they’ve cashed your check; they inspect your apartment to insure that you’re using your 22-year-old refrigerator; two of five washing machines in a laundry room meant for over 100 apartments are unplugged. They hang padding 24/7 in elevators that rent stabilized tenants have paid for so transients can readily move in and out. They are the most interesting landlords in the world.

Mendez is a fighter for tenants and the poor

I was interested to read your profile on both of the candidates in the Democratic Primary in the Second District, which immediately abuts my own.

Since your piece took pains to be balanced, I thought it worth pointing out to your readers that this is not really a close call – Rosie Mendez deserves to win this one decisively.

I have served in the City Council now for a number of years, and have had the great pleasure of calling Rosie Mendez a colleague and a friend. She is an impressive advocate for tenants, for seniors, and for the poor. She has stood with me every time I needed her – and even played a critical role in our efforts to protect tenants’ interests in Stuyvesant Town and Peter Cooper.

As Chair of the Committee on Public Housing, Rosie also has been a tremendous advocate for residents of those communities. She has secured $10 million for security enhancements and disability access, and in 2008, she restored $38 million to prevent the closing of community centers.

In the days immediately after Superstorm Sandy, Rosie and her staff were among the first responders on the Lower East Side, where they coordinated with local nonprofits to ensure that stranded residents received the necessities they needed. Since the storm, she has has diligently worked on an emergency plan to make sure that the city is better prepared for our next storm.

I have also enjoyed partnering with Rosie in supporting our local public schools – many of which, like PS 40 and PS 116, physically sit in her district, but serve both of our constituents. I look forward to continuing that high level of collaboration on all issues.

Rosie is one of the toughest leaders I know, and I encourage the residents of the Second Council District to send her back to City Hall to fight for all of us, even those of us who live next door.

No closet door left unopened

My apartment was recently inspected by CompassRock. Their notification letter was commanding but having no option and nothing to hide anyway, I waited for the day to arrive.

The inspector entered politely, accompanied by a security guard, and immediately informed me that he would also be “looking at” the closets.

Taken aback yet somehow not surprised in this environment of mistrust, I followed him from room to room and he opened the doors himself. The security guard remained inside the front door.

The inspection lasted just a few minutes but, sadly, the negative effects on me have lingered. I approached the inspection in good faith, under the impression they were looking for illegal subdivision of rooms or major structural problems or similar. I consider it a violation of privacy and an insult to my integrity for a total stranger to inspect closets which, as well as utilitarian items, hold personal items.
The community newsletter, which arrived after the inspection, writes of ensuring apartments are in compliance with applicable laws, lease terms and community rules, looking for unsafe conditions, unregistered dogs and compliance with the 80 percent carpet rule. It had never occurred to me that closets fell into this category.

With nearly 25 years of tenancy, I have come to love where I live. For the most part, I welcome the physical and demographic changes, which have taken place. Sadly, my experience with the inspection has left me feeling like some kind of criminal, and has further fostered the culture of unease that successive managements seem to enjoy encouraging. Indeed, a neighbor whose apartment was inspected in their absence with their agreement (but who did not share my feelings), advised me against speaking out for fear of reprisal.

Furthermore, I have now discovered that not all apartment inspections included closets – and not all were conducted by more than one representative.

Rent abatement waiver isn’t unfair

To the editor,

Public Advocate DeBlasio and the Tenants Association are seeking headlines by belittling CW Capital’s decision to grant a 15 percent rent reduction, in exchange for a promise not to be sued for losses related to the hurricane.

This is surprising, because tenants have nothing to lose by signing the waiver – and everything to gain.

The maximum damages any tenant could recover in a lawsuit would be the rent such tenant paid during the period in which their apartment did not have power. Management could contest this argument, noting that most tenants had running water and flashlights.

Moreover, suing management would take three to five years, and legal fees could consume up to a third of any recovery.

With 11,000 tenants in ST/PCV, including hundreds of attorneys, there are bound to be a few lawyers who will try to trick tenants into believing they could recover more than they were due. But let’s review the results of the Roberts litigation – which took five years and mainly enriched only the lawyers.

Moreover, if a class action were to be initiated against CW Capital, it would throw yet another wrench into the process leading to a non-eviction condo conversion of the property. A large, outstanding litigation against the property could cause our partner Brookfield Management to have a change of heart, and could spook any financing partners Brookfield would bring to the table.

A more prudent and ethical course for our neighbors is to gracefully accept the rent abatement and to say “thank you.” It would be far more constructive to sign the waiver and acknowledge that CW in fact did heroic work in restoring power after the unprecedented violence of the storm.

Rather than advise a rent strike, the Tenants Association should recall that civility is never a sign of weakness.

Conversion would bring back stability

To the Editor:

After the ST/PCV Tenants Association’s recent mailing to residents explaining that it will be taking its plan for a rental or purchase conversion plan directly to bondholders, two long-time neighbors asked me why a conversion was needed at all – why Stuy Town and Peter Cooper can’t just go happily on as an all-rental community. The answer is pretty simple: Because MetLife sold us to Tishman Speyer for $5.4 billion dollars (most of it borrowed.)

As Tishman Speyer learned in its brief, turbulent few years as owner – there is no way that the income from rent-stabilized apartments can support maintenance along with payments on that huge debt. So while it’s possible that we could remain an all-rental community, there is no way that we can remain an affordable all-rental community.

Unless we tenants can gain control of our lives – which is the goal of the Tenants Association-Brookfield plan for a condo conversion with the option to remain a stabilized renter – the future looks grim for those of us who love this place.

If CW Capital chooses to sell to another Tishman-like real estate operator, the new owner must make a concerted drive to increase revenues by replacing rent-stabilized residents with those who can pay market rates. Long-time residents would face renewed harassment to drive them from their homes and, if they managed to stay, would be surrounded by crowds of eight or nine young people jammed into the two-bedroom market-rate apartments it takes eight or nine of them to pay for.

The other destructive possibility is that a new owner would view our wonderful parks and playgrounds as potential profit centers with who-knows-what-kind-of commercial development consuming some of these 80 prime New York acres.

I’ve lived here for 51 years and, like many others, would love to recapture those happy days when we were a family-oriented community of rent-stabilized tenants, when there was one porter per building and the parking garages charged $35 a month.

But Met Life built this community as a kind of public service to returning World War II veterans. Met’s little Eden was a unique, historic and not-to-be-repeated event that we lucked into. No profit; they just needed to break even.

We can’t go back to the good old days, so let’s move forward to a return to stability. Someone who understands these things explained to me that the TA-Brookfield conversion plan would produce that stability by lessening dependence on rental income to cover operating costs and debt payments.

In addition to the upfront capital Brookfield can provide, the many current residents and outsiders who would value ownership of their homes would also help produce the capital needed to maintain the property and to lower the size of a new mortgage, making a structurally sound and affordable combined ownership-rental community possible into the future.

Soni Fink, PCV

Note: The author of this letter is a board member of the Tenants Association, though she is not writing on behalf of the TA.Continue reading →

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About Town & Village

Town & Village is a print newspaper that has been serving the community since 1947, covering neighborhoods in the East Side of Manhattan, including Stuyvesant Town, Peter Cooper Village, Waterside Plaza, Gramercy Park, Union Square, East Midtown Plaza and Kips Bay.

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About us

Town & Village is a print newspaper that has been serving the community since 1947, covering neighborhoods in the East Side of Manhattan, including Stuyvesant Town, Peter Cooper Village, Waterside Plaza, Gramercy Park, Union Square, East Midtown Plaza and Kips Bay.